RTRS:VEGOILS-Palm oil bounces on S. American weather concerns
* Argentina's drought may worsen this week - meteorologists
* Palm oil futures down 0.4 pct so far this year
* No flood warnings issued by Malaysian weather office
(Updates prices, adds details)
By Chew Yee Kiat
SINGAPORE, Jan 17 (Reuters) - Malaysian crude palm oil
futures bounced back on Tuesday, as concerns over dry weather
forecast in Argentina and Brazil that could potentially tighten
soyoil supplies offset investor fears about the euro zone debt
crisis.
Argentina's drought will worsen this week, say local
meteorologists, dashing hopes that rain in the days ahead might
be strong enough to revive parched corn and soy fields.
"It looks like the dry spell is back in South America,
however weak technicals and still lagging exports are likely to
limit the upside here," said a dealer with a foreign commodities
brokerage in Malaysia.
But investors are also keeping a close watch on the euro
zone debt crisis that weighed on palm oil futures, which are
down 0.4 percent so far this year.
By the midday break, benchmark April palm oil futures
on the Bursa Malaysia Derivatives Exchange jumped 1.1
percent to 3,161 ringgit ($1010) per tonne. Prices dropped to
3,099 ringgit the previous day, a level last seen on Dec. 22.
Traded volumes stood at 14,878 lots of 25 tonnes each,
higher than the usual 12,500 lots as some traders are evening
out their positions before the Lunar New Year holidays next
week.
The Malaysian weather office did not issue any heavy rain
warning but the market is watching closely as floods could
complicate the delivery of palm oil from plantations to ports
and refineries.
A slowdown in demand as top buyers, including China and
India, cut back orders helped ease pressure from tightening
stocks.
Malaysia's palm oil exports posted an 11 percent drop for
the first 15 days in January to levels below 600,000 tonnes,
said cargo surveyors Intertek Testing Services and Societe
Generale de Surveillance.
But the pace of exports was stronger than the first 10 days
of the month on the back of last minute imports by China before
closing for the Lunar New Year holiday next week.
In related markets, Brent crude futures rose on Tuesday to
stand close to $112 on expectations of steady demand growth
after the world's second-largest oil consumer, China, posted an
economic expansion that beat forecasts.
Other vegetable oil markets also bounced back after posting
earlier losses.
The U.S. soyoil contract for March delivery gained 1
percent while the most active September 2012 soyoil contract
on China's Dalian commodity exchange inched up 0.3
percent.
Palm, soy and crude oil prices at 0447 GMT
Contract Month Last Change Low High Volume
MY PALM OIL FEB2 3181 +20.00 3165 3183 561
MY PALM OIL MAR2 3169 +33.00 3145 3170 2013
MY PALM OIL APR2 3161 +35.00 3134 3162 7143
CHINA PALM OLEIN SEP2 7944 +22.00 7924 7990 45908
CHINA SOYOIL SEP2 8914 +28.00 8882 8944 149556
CBOT SOY OIL MAR2 50.78 +0.49 50.50 50.98 4239
NYMEX CRUDE FEB2 100.24 +1.54 98.60 100.30 39855
Palm oil prices in Malaysian ringgit per tonne
CBOT soy oil in U.S. cents per pound
Dalian soy oil and RBD palm olein in Chinese yuan per tonne
Crude in U.S. dollars per barrel
